Amazon Increases Investments in India

Dated: June 11, 2016

Amazon has recently announced a massive investment in India mounting pressure on homegrown rivals Flipkart and Snapdeal and putting on notice China’s Alibaba. The total investment in the country will mount upto $5billion.

“We have already created some 45,000 jobs in India and continue to see huge potential in the Indian economy. Our Amazon.in team is surpassing even our most ambitious planned milestones, and I’m pleased to announce today that we’ll invest an additional US $3 billion on top of the US $2 billion that we announced in 2014, bringing our total investment in India to over US $5 billion.” said Jeff Bezos, Founder and CEO of Amazon.com.

Amazon founder Jeff Bezos made the big announcement of a further $3-billion (Rs 20,000 crore) investment in the presence of Prime Minister Narendra Modi, for whom canvassing foreign investment from American companies has been an important agenda. For Bezos, having Modi in the audience in Washington DC while promising more money for his Indian operations is a clever move that could help him score points at the highest level of government as Amazon lobbies for easier foreign investment regulations.

“This is a timely injection of funds by Amazon, especially considering the fact that many Indian e-commerce companies are finding it difficult to raise money,” said Sreedhar Prasad, partner, e-commerce, at KPMG. “With very little differentiating the large e-tailers in India, there is a lot of scope to enhance the logistics network and fulfilment capabilities overall as well as expand to the tier 2-3 cities and rural India and gain geographic dominance in these states.”